Palm-Oil Shipments From Indonesia Set to Gain on Lower Duty

July 31 (Bloomberg) -- Palm-oil shipments from Indonesia,
the largest producer, may have climbed 23 percent in July from a
month earlier as companies took advantage of a lower export tax
to book cargoes and demand rose ahead of a Muslim festival.

Exports will probably gain to 1.4 million metric tons from
1.14 million tons in June, according to the median of five
plantation executives in a Bloomberg News survey. Output may
fall 5 percent to 2 million tons, three of the respondents said.
The executives didn’t provide estimates for inventories.

Palm oil in Malaysia, the global benchmark price in the
second-largest producer, has advanced 4.7 percent from an eight-month low in June as soybeans in Chicago rallied to a record on
damage from a drought in the U.S. Indonesia cut the duty for
exports to 15 percent this month from 19.5 percent in June.

“Exports will increase as some shipments were delayed to
July” because of the lower tax, Joelianto, a Jakarta-based
trader at PT Sinar Mas Agro Resources and Technology, a unit of
Golden Agri-Resources Ltd., said by e-mail, adding that demand
for the Eid festival also supported overseas sales.

Most-active palm oil futures were at 2,970 ringgit ($945) a
ton on the Malaysia Derivatives Exchange at 11:18 a.m. in Kuala
Lumpur. Soybeans, which can be crushed to provide a rival oil,
reached a record $16.915 a bushel on the Chicago Board of Trade
on July 23. That day, soybean oil was $263.43 a ton more costly
than palm oil, the biggest premium since September.

Tax Policy

The Indonesian government reviews the tax rates and base
export prices every month, based on average rates in Kuala
Lumpur, Rotterdam and Jakarta. The tax will remain at 15 percent
in August, Deddy Saleh, director general of foreign trade at the
Trade Ministry, said on July 27. The base price to calculate the
levy was raised to $950 a ton for August from $944.

Muslims celebrate the Eid festival next month, which marks
the end of the Ramadan fasting month, when consumption of
cooking oils typically climbs as communal meals lift overall
demand for the staple.

Indonesia exported 1.14 million tons of palm oil last month,
17 percent less than May, the Indonesia Palm Oil Association, or
Gapki, said July 27. That was lower than the median estimate of
1.5 million tons from five companies in a Bloomberg survey.

Indonesia’s shipments of palm kernel oil rose 49 percent to
111,640 tons in June from a month earlier, Gapki data show,
bringing total palm and lauric-oil exports to 1.25 million tons
last month, down 13 percent from May.

Exports of palm and kernel oils to India fell 30 percent to
311,850 tons last month, while shipments to China rose 18
percent to 311,030 tons, data show. European countries bought
240,560 tons in June, 17 percent less than a month earlier.

Output and exports from Indonesia may decline in August as
activities slow during the Eid holiday, said Susanto, head of
marketing at the palm oil association. Shipments may rebound in
September and October in line with higher production, said Teguh
Patriawan, president director of PT Nusantara Sawit Persada.